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Gray Divorce

Carol Hughes: Advice About Divorce and Adult Children

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Psychotherapist, Divorce Coach, Child Specialist, and Mediator Dr. Carol Hughes was recently featured on the website Bottom Line Inc., in the article “What To Do When Your Parents Divorce – And You’re Already a Grown Up.”

With the holidays ahead, Dr. Hughes explains what the adult children of divorced or divorcing parents need to know to respond to common situations, including:

  • Feelings of abandonment are normal, even for adult children
  • Divorcing parents may lean on adult children for support, and why it can hurt your OWN marriage
  • Divorce parents may battle each other through their adult children, causing conflict between parent and child, or among siblings
  • Old holiday traditions may be broken; consider establishing new holiday traditions
  • It’s normal and it’s OK to feel relieved about your parents’ divorce
  • Four ways divorcing parents can limit the fallout from their divorce for their adult children

The website Bottom Line provides wellness and wealth advice from experts, including Dr. Hughes.  Its approach offers “useful, expert, actionable information to help you navigate your world, saving time and money along the way.”

Read the entire article at this link.

 

The Effect of California Propositions 60 and 90 on Your Divorce

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by Diana L. Martinez Collaborative Lawyer and Mediator, West Coast Law & Mediation, APC

When you are trying to navigate a divorce, there are many issues you need to address. If you own property in California, your decisions about your real estate can be among the most challenging, and perilous, if you are not fully informed.

One area often overlooked when making decisions about real property are the tax consequences. The tax implications can end up making a significant impact on your financial well-being, especially if you are part of the current wave of “gray divorces” among adults 55 years and older.

Many older couples who own property qualify for a lower property tax rate under California’s original Proposition 13. At the discretion of each county in California, Proposition 60 and Proposition 90 allow qualifying sellers to carry their Proposition 13 tax base on their original property with them towards the purchase of a new property of equal or lesser value. (Prop 60 governs real estate sales and purchases in the same county; Prop 90 governs real estates sales and purchases between two California counties).

Proposition 13 protects longtime homeowners against escalating property taxes as the value of their property increase. Base year values cannot go up by more than two percent per year, keeping the tax increase at a manageable level. Unless there is a change of ownership, or new construction, the base year value does not change. Unfortunately, this discouraged many people from selling property as their family circumstances changed.

Consider the following example:

Jason, 56, and Julia, 53, want to sell their five bedroom home on a large lot since their children are now grown and have homes of their own. They have lived in their current home for many years. The Proposition 13 base year value of $40,000 from 1975 grew to $66,000 by 2002. Their property tax bill is approximately $700 per year. Their current home assessment value is $400,000. Jason and Julia have found a two-bedroom townhouse for $370,000. But they are unwilling to move because this change of ownership will establish a new tax assessment for the townhouse based primarily on their purchase price, and their tax bill will jump from $700 to approximately $3,700 per year. They are on a fixed income and cannot afford the additional $3,000 per year in taxes.

To resolve this problem, Propositions 60 and 90 permit people over age 55 to sell one home and buy another of equal or lesser value within two years and take the Proposition 13 base value with them. Using the above example, Jason and Julia could move to the townhouse and still pay $700 per year in property taxes (tax rate and fees may make the total bill smaller or larger), plus the future increase of no greater than two percent. There are many requirements to qualify for the tax base transfer, and it can be used only once.

Why is this important in a divorce situation? It can only be used once and it cannot be divided between the spouses. This is the real kicker: family courts do not have this issue on their list of items requiring resolution. In all of my years of practice, I have never heard a judge ask about the tax base transfer.

In recent years, California has seen a sharp increase in gray divorces. Many of these couples are retired or near retirement age. This issue rarely came up in early years since most divorcing couples did not meet the age qualification.

We live in a different world today. What happens if this issue is not resolved or even addressed in your contested, mediated, or Collaborative divorce? The first person to apply for the transfer will get the transfer.

Real Estate Agent Julaine Wagonner of ReMax College Park Realty says often the ex-spouse won’t know his or her ex filed the application first until as late as the end of the year or until they receive their own rejection notice. It can take several months before the county updates the tax records to reflect a reduced/carried over tax base.

This is just one of several financial risks often missed during a divorce. Others include how to allocate any capital gains tax, for example. It is easy for even the most experienced family law attorney to overlook these issues. Confer with a financial professional who can assess your personal circumstances and work with your family law attorney to address and resolve these issues before you sign any judgment or make any requests for orders of the judge related to your real estate. Get the information from the expert to make sure your decisions are as complete as they can be, to set yourself on a path for a successful future.

Social Security and How It Affects Your Divorce

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by Tracy S. McKenney, CFP®, CDFA™
Irvine, California

When a couple divorces, you may wonder whether anything happens to their Social Security benefits.  What if the husband has been employed the entire marriage and the wife has stayed home with the children?  Do they split the husband’s Social Security benefit at retirement?  What if one of them remarries?

First, divorce laws are different from state to state.  Social Security is a federal program and can’t be overridden by

Orange County Divorce Financial Analyst Tracy McKenney
Tracy McKenney

divorce laws or a divorce judgment in any individual state including California.  California courts cannot issue a divorce judgment to ‘split’ Social Security payments at retirement, because the federal rules governing Social Security override them.

What does the law say about Social Security and Divorce?

As of summer 2016, if a person has been married longer than 10 years and then gets divorced, the ex-spouse can receive 50 percent of their former spouse’s Social Security benefit –OR- 100 percent of their own Social Security benefit.  Notice: you can collect only ONE benefit, not both.

For example, “Dolly” and “Dennis” got divorced when Dolly was age 52, and Dennis was age 54.  Dennis decided to start collecting Social Security when he turned 67.  Dolly only worked part-time for most of their 27 year marriage.  She decided to start collecting Social Security benefits as soon as possible, at age 62.  Dennis collected on his own benefit because it was higher than ex-spouse Dolly’s benefit.  Dolly made an appointment with her local Social Security office two months before she turned age 62.  Dennis’s benefit was higher than hers so she collected based upon his benefit.  Note: Anytime you start social security earlier than your full retirement age (see more below), you will receive a reduced benefit.

Before your ex-spouse gets angry over losing half of his or her government retirement benefits, the Social Security Administration is willing to pay out 100 percent to your ex-spouse and 50 percent to you from your ex-spouse’s work history.  Yes, Social Security will pay 150 percent if you meet the qualifications.

Social Security payments can start as early as age 62.  Your monthly payments are reduced at age 62.  Full Retirement Age (FRA) is based upon your birth year.  FRA is age 65 for anyone born before 1937; 66 for anyone born 1943-1954; and age 67 for anyone born 1960 or later.  You can look up your own FRA at www.ssa.gov.  Be aware the FRA age for you personally is based upon YOUR age, not your ex-spouse’s age.  If you delay claiming Social Security benefits until age 70, you will receive additional income if you claim on your own work history, but will NOT receive additional income at age 70 if you claim based upon your ex-spouse’s work history.

Remarriage Affects Your Retirement Benefits

What happens if either ex-spouse remarries?  If you remarry before age 60, then you will not be able to claim benefits based upon the ex-spouse’s work history.  If you remarry after age 60, then you can claim based upon your ex-spouse, your current spouse or your own work history.  Choose wisely because you only get ONE benefit.  If you have been married over 10 years more than once, you can claim on either ex-spouse, whichever is more favorable to you.

What happens if your ex-spouse dies?

Social Security has survivor benefits if your ex-spouse dies.  If you are eligible to claim on your ex-spouse’s work history, then you also qualify for a survivor benefit.  You can receive the same benefits as the widow/widower of your ex-spouse.

For more information, go to www.ssa.gov and search ‘divorced spouse benefits’ or ‘divorced survivor benefits.’

Securities offered through Securities America, Inc., a Registered Broker/Dealer, Member FINRA/SIPC.  Tracy S. McKenney, Registered Representative.  Advisory Services offered through Securities America Advisors, Inc., an SEC-Registered Investment Advisor.  Securities America and its representatives do not offer tax or legal advice.  You should consult with and rely on your own legal and tax advisors.  6/2016

How to Talk About Your Divorce With Your Adult Children

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by Carol R. Hughes, Ph.D., LMFT

One of the most difficult steps in the divorce process is talking about your decision with your adult children. It may feel like admitting a failure, or letting them down.

Divorce is a major life crisis for all family members and should be treated as such, even when your children are no longer “kids.” Children who are adults when their parents divorced consistently report years later the news of their parents’ divorce “rocked the very foundation” of their world.

You are making a good start and doing the best you can. You are reading this blog post. Give yourself permission not to be perfect. No one is perfect. Breathe deeply; you and your children can get through this difficult time together. These tips will help guide you through this process.

  1. Schedule a time when you can speak with your children together and preferably in person. Siblings benefit from the support system they can provide each other. When you are scheduling the time to talk, tell them you have something important to discuss with them. Assure them no one is sick or dying. If they ask you what you want to talk about, tell them you prefer to discuss it in person when you are together.

If it isn’t possible to speak in person, schedule a time to speak via Skype, Face Time or another video chat program. Avoid telling them via telephone and especially resist the temptation to communicate via email. It is too impersonal.

  1. Plan your presentation to your children in advance. Make some notes about what you plan to say and review them so you are familiar with what you intend to say. Anticipate what they may say to you. You can have the notes in front of you, if you wish, and simply say, “We have made some notes because what we are going to be talking about is very important for all of us and we don’t want to forget anything.”

Remember your children will likely be in emotional shock after you tell them your intentions to end your marriage. They will not be able to absorb everything you say this first time. Be prepared to have the same conversation with them multiple times. Their shock and grieving will interfere with them being able to fully take in all that you are sharing.

  1. Explain the two of you have decided to end your marriage because you have problems between you have not been able to resolve. Avoid using the word “divorce” because it is laden with negative connotations.
  1. Avoid blaming each other. This is the time for the two of you show a united front to your children. Remember this news will shatter their view of their family as they have known it for many years. Blaming each other puts them in the middle of your pain and conflict, causes them to experience divided loyalty and forces the impression they need to choose sides, as well as feel guilt for loving both of you. Adult children report they hated being put in this position and feeling that each parent was attempting to form an alliance with them against the other parent.
  1. Tell them what will remain the same. Tell them that you are all still family, you will always be their parents and your intention is to be amicable so that you can both attend family gatherings and not create tension for them and their significant others. If they are still in college, tell them if you will be continuing the financial arrangements you have had in place. Tell them if one of you intends to stay in the family home. Assure them they will continue to have the emotional support of both parents in the newly restructured family.
  1. Tell them what will not remain the same. You may be unable to continue the financial arrangements you had regarding college. You may intend to sell the family home. If you are helping them pay off college loans and won’t be able to continue doing so, inform them. Assure them you will do everything possible to assist them financially, as you have in the past, while at the same time acknowledging there will be some economic impact as the family restructures. It’s important to be neutral and factual. Resist being a victim or martyr. It will only make them feel guilty or angry at their other parent.
  1. Remember, no matter how old your children are, you are still their parents. It is your job to put their feelings above yours and provide them with the support they need to hear, feel and understand. Acknowledge you realize the announcement is a shock and their feelings (anger, sadness, grief, shock, etc.) are normal. Focus on and be empathetic with THEIR feelings. Don’t talk about your feelings, e.g., how you haven’t been happy for years, how you deserve to be happy, etc. Having just received such painful news, they will be unable to express their happiness for you, and it is unreasonable for you to expect them to do so. Bear in mind their familial foundation has just been rocked and their family history has been rewritten. They have become members of the “lost nest” generation. There will be no “family nest” to return to at the holidays.
  1. Tell them you still believe in family and you hope they will too. This doesn’t mean that they will not be able to having a strong and happy relationship. Tell them you don’t expect them to take care of you emotionally or physically. This is your job, not theirs. Tell them you have, or plan to have, your own support system separate from them and you want them to establish a support system for themselves as well.

Online groups for adult children whose parents are divorcing can be helpful. The books “A Grief Out of Season: When Your Parents Divorce in Your Adult Years,” and “The Way They Were: Dealing with Your Parents’ Divorce after a Lifetime” (both available via Amazon.com with excellent reviews) will help them realize they are not alone.

  1. Avoid telling them you stayed together or delayed restructuring your family because of them. This will make them feel guilty for your unhappy marriage. They will recall their childhood memories and wonder: ‘What was real and what wasn’t real? Were you really happy on those family vacations? Has my whole life been a sham?’ Divorce destabilizes the family system and inevitably shakes every family member’s perception of their past, their present and their future.
  1. Assure them that this will be a process for all of you to move through, at our own pace and in your own way. Assure them you will always love them and you will always be there for them in whatever ways will be most helpful to them. You want them to know they aren’t alone so they don’t become isolated and depressed. Encourage them to speak with a counselor about their feelings. Tell them you have spoken with or intend to speak with a counselor as well, because you have learned the end of a marriage is a major life stressor for all family members, second only to the death of a loved one. This too shall pass.

 

The Gray Divorce

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by Leslee J. Newman, CFLS, Family Law Attorney

Although divorce rates in the United States have seen a decrease in the last decade, divorce rates for couples over 50 have doubled. According to U.S. Census Bureau data, in 2010, one out of every 20 people in the U.S. who divorced was over the age of 65!   Now, with the retirement of the “Baby Boom” generation (persons born between 1946 and 1967), the numbers of divorcing seniors is expected to escalate.  This phenomenon is often referred to as “gray divorce.”

Some reasons for this increase in gray divorce include the following:

  • There’s no longer a social stigma for seniors divorcing.
  • Seniors are living longer and are generally healthier.
  • Our culture promotes happiness.

A few years ago, a Chicago area billboard advertised divorce with a message that life was too short to be miserable.

Are you a senior and contemplating divorce? Have you helped a parent, colleague or friend who was in their 50s, 60s, or older get through their divorce? Does it make sense financially for a senior married couple to divorce?